The government order specifies that the ban has been imposed on raw, white and refined sugar and also marks a shift in policy from “restricted” to “prohibited”.
Workers harvest sugarcane in a filed in Kolhapur district in the western state of Maharashtra, India. (Source: Reuters)
India announced a ban on sugar exports with immediate effect on Wednesday as the world’s second-largest sugar producer attempts to rein in local prices.
The government has taken this step of tightening overseas shipments amid domestic supply considerations.
According to the government notification, the ban on sugar exports will remain in effect until September 30, 2026 or until further orders are given by the government.
The step is likely to support prices of global white and raw sugar while allowing rival sugar-producing nations, like Brazil and Thailand, to increase their shipments to Asian and African buyers.
What Did The Govt Order On Sugar Export Ban Say?
The Directorate General of Foreign Trade under the Ministry of Commerce and Industry has issued the order. The order specifies that the ban only applies to raw, white and refined sugar, while marking a shift in policy from “restricted” to “prohibited”.
The shipments already in the export pipeline will be allowed to proceed under specified conditions.
As per the order, the consignments would be permitted if loading had already started before publication of the notification in the Official Gazette.
The exports will also be permitted where a shipping bill has been filed, and the ship has already berthed, arrived or anchored at any port in India.
“The export of sugar shall be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments,” the order stated.
The shipments will also be cleared if sugar has already been given over to customs or a custodian before the publication of the notification, stated the government.
However, the sugar exports to the European Union and the United States will not face the ban under the existing tariff-rate quota and arrangements, the government stated.
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Did Inflation, Supply Risk Push Sugar Export Ban?
Estimates suggest India could produce around 275 lakh tonnes of sugar during the 2025-26 marketing year, which runs from October to September.
The Indian Sugar & Bio-Energy Manufacturers Association had last month projected that India’s gross sugar production would reach 32 million tonnes in this season ending September 30.
The estimate was lowered from an earlier projection of 32.4 million tonnes, prompting experts to view the export ban as a precautionary step aimed at curbing inflationary pressures amid growing uncertainty linked to the ongoing Middle East conflict.
The government is also keeping an eye on the next crop cycle, with fears that production in 2026-27 may weaken. Forecasts of a possible El Niño weather pattern have raised concerns about below-normal rainfall, while tensions in the Middle East have sparked worries over fertiliser supply disruptions.
The sudden policy shift is likely to impact sugar mills and exporters, many of whom had already entered into overseas supply agreements before the ban was announced.
The move also triggered a sharp reaction in international markets. Raw sugar futures in New York climbed over 2%, while white sugar prices in London surged around 3% following the announcement.
India, the world’s second-largest sugar producer after Brazil, plays a major role in the global sugar trade. Any restriction on exports from India tends to tighten global supply, particularly affecting importing nations across Asia and Africa.
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